Chapter 11, Problem 15CE

Classification of Cash Flows

Patel Company reported the following items in its statement of cash flows presented using the indirect method.

a. Issuance of common stock

b. Cash paid for interest

c. Sold equipment for cash

d. Receipt of cash dividend on investment

e. Repayment of principal on long-term debt

f. Loss on disposal of equipment.

Required:

Indicate whether each item should be classified as a cash flow from operating activities, a cash flow from investing activities, a cash flow from financing activities.

Use the following information for Cornerstone Exercises 11-16 and 11-17:

A review of the balance sheet of Peterson Inc. revealed the following changes in the account balances:

a. Increase in long-term investment

b Increase in accounts receivable

c. Increase in common stock

d. Increase in long-term debt

e. Decrease in accounts payable

f. Decrease in supplies inventory

g. Increase in prepaid insurance

h. Decrease in retained earnings